The oil price shot up again tonight amid fears of hurricane damage to oil platforms and refineries in the Gulf of Mexico.

Tropical Storm Gustav was fast developing into a full-blown hurricane as it stood poised to enter the oil-rich region. The Gulf is home to a quarter of US crude oil production and 15% of its natural gas.

London Brent crude rocketed $2.18 a barrel to $116.34 while New York crude shot up $2.13 to $117.71.

While the oil price is still well shy of its peaks at nearly $150 a barrel in July, it has remained stubbornly high in August. Analysts pointed out, however, that today's jump followed a $2-plus fall in prices yesterday after the US authorities pledged to release emergency stockpiles if Gustav does disrupt US oil output.

Part of the rise in oil prices tonight was put down to US traders' concerns about leaving themselves short of oil ahead of the Labor Day public holiday on Monday with Gustav potentially poised to strike at oil platforms over the weekend.

Oil experts are predicting Gustav will wreak the worst damage since Hurricane Katrina nearly three years ago. Shell and others have been evacuating facilities. Gustav has been blamed for scores of deaths in the Caribbean.

Meanwhile, another storm tonight was forming in the Atlantic Ocean, Tropical Storm Hanna. It could threaten the Bahamas and Florida.